Devine Restaurant Analysis

Executive Summary

The objective of this report is to assess the variability of Devine Inc’s restaurant sales with different independent or explanatory variables such as macroeconomic conditions and also, predict the sales for the quarters of 2014 using the regression analysis models. The sales data provided for our quantitative analysis was from year 2002 – 2013 for all the nine restaurants by Devine. The key constraint for this exercise was incomplete last quarter data for year 2013 which we successfully overcame by running appropriate regression methods.

While analyzing the data for the given periods, we realized that there is a seasonal impact on the quarterly data for each year. Hence, in order to predict for the 2014 forecast of quarterly revenue we deseasonalized the input sales data. Eventually, we came up with our prediction for 2014 using the time series method of regression analysis for all the stores, except the one that got closed on 2010. Based on our analysis, Devine can expect a growth rate of 3.61% for the coming year which cannot be considered significant, especially if we consider that the retail food sales increased by an average growth rate of 9.88% in last 5 years.

Also, we tried to figure out the impact of different macroeconomic variables on Devine’s revenue and we assessed the impact of key variables such as the national retail food sales, the amount of spending by foreign residents in Canada and the personal disposable income of the Canadians. For the above key factors, we had the given data but we did not have any available options to validate the legitimacy of the given data.

However, based on the given data we understood that apart from national disposable personal income, the other two variables have very limited impact on Devine’s performance or revenue as a whole. For national disposable personal income, an increase of 1 billion will result in an increase of 7.89 million of Devine’s revenue.

Based, on our analysis and the given...